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Court gives 'Kochadaiiyaan' relief on tax issue

While fans around the country have been eagerly waiting for
the release of the Rajinikanth starrer
'Kochadaiiyaan', its makers had got involved in a bit of tax tangle. The
makers were happy with an order from the Tamil Nadu Government issued on 12th
May that exempted the film from entertainment tax. But their happiness had been
short lived as an advocate; S Muthiah filed a PIL (Public Interest Litigation)
at Madras High Court challenging the order’s validity. He argued in the
petition that since many PIL’s related with the issue of tax exemption are
still pending in court, the government did an improper thing by giving tax
relief to 'Kochadaiiyaan'. It was also mentioned that recent Tamil films like
'Ennamo Edho' and 'Tenaliraman’, the comeback film of Vadivelu, was not given
tax relief.

But now the producers can take a sigh of relief because the
Madras High Court has decided not to interfere with the order of the
government. An order was passed by a
vacation bench comprising Justice R Mahadevan and Justice MM Sundresh telling
exhibitors and authorities not to collect entertainment tax from the viewers.
"Exhibitors cannot demand and collect the amount from the general public
who go to see the movie. We pass an interim order directing the authorities as
well as their agents, including the exhibitors, from collecting any tax for
which the exemption has been granted by the government."

However there was no mention regarding those who have
already booked tickets with the full amount. Whether they will get refunds or
not is not clear at this moment. Going by the Tamil Nadu Entertainments Tax Act
1939, a percentage of the gross collection of a movie has to be paid as
entertainment tax. For new films it is 15% and for old films the rate is 10 %.
However since 2006, the Tamil Nadu govt. took the policy of giving tax
exemption to films that have Tamil titles and/ or promotes the culture of the
state. The film also needs to secure a
‘U’ certification from the Censors.

This year on 6th of May, the Tamil Nadu government had
issued a circular that said the exemption of the tax will be counted from the
date of the issue of the actual order and not before that. Since the order for
‘Kochadaiiyaan’ was issued on 12th May, thousands of fans who booked tickets
earlier were unable to enjoy the benefits of the exemption. After exemption the
ticket prices will become 15 % lower. The film is set to release on 23rd May.